Even if you do end up buying a new car however, it doesn’t have to be brand new, just new to you.

Buy second hand

Second hand cars are not only much cheaper than brand new cars but also represent much better value for money. A major reason for this is because a second hand car has already experienced the heaviest point of depreciation that it will suffer in its lifetime; namely the moment that it is driven out of the showroom for the first time. On average, this point in the lifetime of a car reduces the value of the vehicle by around 20%.

Great used cars include the Ford Focus, the Honda Civic and the Lexus GS. You might want to avoid a few of these used cars though!

Know who you’re buying from

Whenever buying a car, it is vital to know with whom you are doing business. This doesn’t mean that you need to take the seller out for dinner and get their entire life story, but you do need to know that they are trustworthy. This is particularly important if buying from an independent dealership or individual, whose track record may not be as transparent as a large company.

Enquire about their previous dealings and don’t be afraid to pull out of negotiations if you’re not completely satisfied. It is important to do your research on a seller to help reduce the chance of you getting ripped off or being sold a dud car, which can be very costly in the long run.

Buy low capacity

Another way to save money when buying a car is to buy a vehicle with a low capacity engine. Cars such as these are not necessarily flashy but they are certainly cheaper than the average vehicle on the road.

In addition to a low starting price, the running costs of low capacities cars are cheap as are the insurance costs. You can find a few other ways to reduce your insurance here.